Selecting the right wholesale products to sell on Amazon is a critical aspect of building a profitable online business. Among the various methods available, direct sourcing has emerged as the preferred approach for many wholesale sellers. This strategy involves working closely with suppliers to identify products that have strong sales potential on Amazon, ensuring a steady flow of popular and profitable items to resell.
How To Select Wholesale Products To Sell On Amazon
One of the key advantages of direct sourcing is its straightforwardness. The process begins by obtaining a list of products from your supplier. Next, you match these products with existing listings on Amazon, focusing on those that are both popular and profitable. This method is widely used by sellers because suppliers often provide significant discounts and favorable deal conditions, allowing for a profitable resale margin.
When selecting products, it’s essential to target items that can yield a profit margin of 15% or more after considering Amazon fees, shipping costs, and other expenses. This margin ensures that your business remains sustainable and profitable over time.
If you do not have an existing supplier, your first step should be to find one that offers a range of products with strong sales potential. Look for suppliers whose products are already performing well but could benefit from increased visibility and better marketing on Amazon. Once you identify a supplier that aligns with your business goals, approach them to negotiate terms for becoming their wholesale reseller.
In summary, direct sourcing provides a reliable pathway to identifying and selecting profitable wholesale products to sell on Amazon. By working with the right suppliers and carefully choosing products with solid profit margins, you can build a successful and sustainable Amazon business.
What Makes A Good Wholesale Product?
When selecting wholesale products to sell on Amazon, it’s essential to evaluate several key factors to ensure success.
Strong Resale Value
A good wholesale product should have consistent and ongoing demand. Products with strong resale value are more likely to sell quickly, minimizing the risk of excess inventory. By choosing items with steady sales, you increase your chances of maintaining profitability.
Manageable Competition
While high demand is important, it’s equally crucial to consider the level of competition. Products that face intense competition with numerous sellers can lead to price wars, ultimately reducing your profits. Aim to select products with manageable competition, which will give you a better chance of achieving higher sales and maintaining healthy profit margins.
Competitive Pricing
The price point of your chosen products should strike a balance between being attractive to customers and allowing for a reasonable profit margin. Ensure that you can offer competitive pricing that draws in customers while still enabling you to turn a profit.
Restrictions and Eligibility
It’s important to be aware of any restrictions or eligibility requirements for selling certain products on Amazon. Some product categories may be restricted, requiring Amazon’s approval before you can list them. Make sure to check for any limitations on your seller account or product restrictions before making any purchasing decisions to avoid being stuck with inventory that you’re not authorized to sell.
Profitability
Finally, the products you select must be profitable. To assess profitability, subtract all associated costs—such as the Cost of Goods (what you pay your supplier), shipping, Amazon fees, and applicable taxes—from the selling price. This will help you determine whether a product can generate a sufficient profit margin.
How To Wholesale On Amazon
Step 1: Find a Supplier
To start wholesaling on Amazon, you first need to identify a supplier. This could be a brand, manufacturer, or large distributor offering the products you wish to sell. You can locate potential suppliers through online directories, trade shows, or by reaching out to manufacturers directly.
Step 2: Negotiate with the Supplier
Contact suppliers to request quotes and compare their prices, terms, and minimum order quantities (MOQs). Engage in negotiations to secure a price that ensures a healthy profit margin for you. Discuss payment methods, credit terms, and potential discounts for bulk orders, and highlight your value as a seller to strengthen your negotiating position.
Step 3: Research and Select High-Profit Products
Obtain a product list from your supplier and use product research tools to evaluate sales data, potential issues, and profitability. Focus on products with strong demand, low competition, attractive profit margins, and positive reviews. Validate your findings to ensure that these products will meet your profit and return on investment (ROI) expectations.
Step 4: Purchase Inventory
After selecting and validating your products, proceed to purchase inventory from your supplier. The MOQ can vary based on the supplier and product, but it often ranges from hundreds to thousands of units.
Step 5: List Your Products on Amazon
With your inventory ready, you can list your products on Amazon. Typically, you will add your offers to existing product listings that already exist in the Amazon catalog. Ensure that your products match the listings precisely to avoid any discrepancies.
Step 6: Fulfill Orders
When customers place orders for your products, you need to fulfill them. You have the option to handle fulfillment yourself or use Amazon’s Fulfillment by Amazon (FBA) service. If you choose FBA, you will send your inventory to Amazon’s fulfillment centers, where Amazon will manage picking, packing, shipping, and customer service for your orders.
Conclusion
In the competitive landscape of Amazon selling, selecting the right wholesale products is crucial to your success. By focusing on products with strong resale value, manageable competition, competitive pricing, and ensuring compliance with Amazon’s restrictions and eligibility requirements, you can build a profitable and sustainable business. At U-Commerce, we are dedicated to helping sellers optimize their Amazon listings and navigate the complexities of the marketplace. By leveraging our expertise, you can make informed decisions about your product selection, maximizing your potential for success and driving your e-commerce business forward.
